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THE ROLE OF BUSINESS RISK AND NON DEBT TAX SHIELDS ON CAPITAL STRUCTURE: A STUDY BASED ON CEMENT SECTOR IN PAKISTAN

Muhammad Asif Joyo (), Nawaz Ahmad and Ghulam Mustafa Shaikh ()
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Muhammad Asif Joyo: M.phil Scholar at Institute of Business Management-IoBM
Ghulam Mustafa Shaikh: Research Associate at Ilma University

IBT Journal of Business Studies (JBS), 2017, vol. 13, issue 2, 36-49

Abstract: Objective The objective of this study is to determine the influence of Business risk and Non Tax shield on Capital structure.Methodology This study is based on panel data of20 companies from the cement sector of Pakistan.Panel regression is applied for statistical analysis.Conclusion This study concludes that business risk and nontax shield has insignificant effect on capital structure debt to equity ratio, whereas the interest coverage has positive effect on debt to equity ratio.Policy Implication As per this study the volatility and business risk involved in the cement sector may have some serious issues if the exports is continuously decline and at same time raising leverage funds may hurt the performance of company

Keywords: Business Risk; Financial Leverage; Debt to Equity Ratio; Cement Sector Pakistan (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:aib:ibtjbs:v:13:y:2017:i:2:p:36-49

DOI: 10.46745/ilma.ibtjbs.2017.132.4

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